Trump praises tariffs in Cabinet meeting as US economy shrinks for first time since 2022
Economy shrinks as companies race to get ahead of the tariffspublished at 13:43 British Summer Time 30 April
Natalie Sherman
New York business reporter
We just got our first comprehensive read of how the US economy was doing at the start of the year.
The US economy shrunk at an annual rate of 0.3% in the first three months of the year, the Commerce Department says.
That marked a sharp downturn after growth at an annual pace of 2.4% in the previous quarter, though the fall was not as severe as some analysts had predicted.
The decline was driven by drop in government spending and a more than 40% surge in imports – which count against growth – as companies raced to get ahead of the tariffs.
Consumer spending growth also slowed from the end of last year, with growth of 1.8%, down from 4% in the prior quarter.
Treasury Secretary Scott Bessent just yesterday urged people to focus less on sentiment and more on the hard data as they try to evaluate how the economy is doing.
This report, which focuses on a period before US President Donald Trump’s most far-reaching tariffs were announced, is unlikely to settle the debate.